BFM: Concepts and Practice · Part B: Risk Management

Chapter 14: Liquidity risk, LCR and NSFR

Gaps, the LCR and the NSFR: how a bank makes sure it can pay every rupee due, even in a stress.

Buyers of the e-book, or of the print copy, which includes it, read the whole chapter. Everyone can read the free sample, pages 1 to 24 of the e-book.

In this chapter

• 14.1What liquidity risk isp. 197
• 14.2The maturity ladderp. 198
• 14.3LCR: the liquid bufferp. 199
• 14.4LCR: outflows and inflowsp. 200
• 14.5Bank N’s LCRp. 201
• 14.6NSFR: stable fundingp. 202
• 14.7Managing liquidityp. 203
• Exam traps and quick checksp. 204
• Practice: 16 questions in three roundsp. 205
• Answers, with every wrong option explainedp. 207
• Make it stickp. 209
• Chapter 14 on one pagep. 210

Corrections and updates

None for this chapter so far. Every correction to the book, and any rule that changes after its date, is listed on the errata page.